Substitue IR35 Assessment Contract Clause

[toastermoster]

Can't see anything specific after searching, so appreciate any opinion.

Been in a contract quite a few month, deemed outside by the firm. They are now wanting me to sign a new agreement to replace the existing (I'm on a direct contract with the firm). Whilst this has the right for substitution, a few clauses are that the they will require the substitute to complete an IR35 assessment. My view is that is not required and should not be agreed to - if I am outside any substitute would by default be outside ?

Looking to push back on this but would appreciate if people agreed. Be easy on me.....

[northernladuk]

Oh dear. Sounds like your client hasn't got a clue. The role is outside and as long as they treat their suppliers as outside it shouldn't matter who is doing it. Doing an IR35 of a contractor is just a waste of time. It's how the client wants the work done, not the individual doing it. Your assumption is correct. If the working practices are outside then it shouldn't matter who is doing the work.

When you say they deemed it outside did they give you an SDS using CEST saying outside? They should have given you a new agreement before the 6th of April when the legislation came in to force. It's a bit late now.

Couple of questions for me. How much trouble will this cause if you try pushing back? What is the likelihood of ever putting sub in bearing in mind 99.999% have never and will never do it? Obviously if this is gonna rock the boat over something you'll never do I wouldn't be that fussed about it personally. All the risk is on the client if they say outside so as long as they are trying to do the right thing and not just completely fudging it you should be safe.

If you really want to be sure then get the contract reviewed by QDOS and the like to see what they say.

[toastermoster]

Thanks northernladuk, thought my thinking was correct so good you agree.

So whilst they are a good bunch, no they don't have much of a clue. Yes, I had a SDS using CEST at the end of March. Was based on me doing the CEST (Yes, I know Turkeys voting for Christmas etc - but on the basis that is how they wanted to do it and the questions were answered honestly I'm not going to argue). So based on this I only got a new contract after 6 Apr.

It's a good point on how much this will rock the boat if I push back, I thought on this a bit more. It probably would cause some hassle, and probably mean this is given more scrutiny which I don't really want. Just happy to 1/ have a contract and 2 / Be outside. I think I may just sign and get on with it. They have also slipped in a liability clause (which I've seen discussed elsewhere and sounds like becoming the norm - i.e the are pushing the liability back to us if it's a wrong determination and HMRC come knocking). Not sure if this even enforcable so think I'll just go with that as well, unlikely I'll get anywhere removing that anyway.

[pr1]

Thanks northernladuk, thought my thinking was correct so good you agree.

So whilst they are a good bunch, no they don't have much of a clue. Yes, I had a SDS using CEST at the end of March. Was based on me doing the CEST (Yes, I know Turkeys voting for Christmas etc - but on the basis that is how they wanted to do it and the questions were answered honestly I'm not going to argue). So based on this I only got a new contract after 6 Apr.

It's a good point on how much this will rock the boat if I push back, I thought on this a bit more. It probably would cause some hassle, and probably mean this is given more scrutiny which I don't really want. Just happy to 1/ have a contract and 2 / Be outside. I think I may just sign and get on with it. They have also slipped in a liability clause (which I've seen discussed elsewhere and sounds like becoming the norm - i.e the are pushing the liability back to us if it's a wrong determination and HMRC come knocking). Not sure if this even enforceable so think I'll just go with that as well, unlikely I'll get anywhere removing that anyway.

Assuming the client is not "small" and as long as they are paying your invoices in full and as expected (i.e. not deducting PAYE taxes etc) then I would just carry on as is and not worry about contract wording with regards to IR35 - all the risk from HMRC is now on them.

Keeping in mind that the chance of any investigation is very low (~1/1000), and the chance of losing the investigation assuming you have a truthfully filled out CEST form agreed by both parties (which HMRC say they will stand by) is probably miniscule, though it will be interesting if/when one of these liability-shifting clauses gets tested - likely to be a few years down the line.

I suspect this type of thing may slowly become the new norm for those who were been ballsy enough to maintain their "outside IR35 or avoid altogether" mentality if clients start struggling to find decent contractors willing to work inside - but it will take some time

[Snooky]

They have also slipped in a liability clause (which I've seen discussed elsewhere and sounds like becoming the norm - i.e the are pushing the liability back to us if it's a wrong determination and HMRC come knocking). Not sure if this even enforcable

IANAL but I'd be amazed if any court upheld that.